TRUSTED ADVISORS TO HEALTHCARE AND LIFE SCIENCE EXECUTIVES

2018 Axendia, Inc.

THE VALUE OF ANALYTICS IN VALUE BASED HEALTHCARE PERSPECTIVES FROM KEY STAKEHOLDERS IN THE HEALTHCARE ECOSYSTEM

By: Daniel R. Matlis and Ellyn McMullin EXECUTIVE SUMMARY The primary drivers for Healthcare today are improving the quality of patient outcomes, enhancing patient-centered care and adopting initiatives that control costs while maximizing patient benefit. Healthcare ecosystem stakeholders, including physicians, clinicians and supply chain professionals utilize data to make value-based procurement decisions for medical devices to ensure and improve patient access to high quality devices. The integrity of these decisions depends upon the accuracy and completeness of unbiased analysis of underlying data to support patient care decisions To understand the value of analytics on medical devices, we asked the Medical Device Innovation Consortium Product Quality Outcomes Analytics thought leaders for their perspective. The Medical Device Innovation Consortium (MDIC) Case for Quality Product Quality Outcomes Analytics (PQOA) working group is a multi-disciplinary team comprised of representatives from manufacturers, physicians, clinicians, healthcare providers, SMEs and FDA. See the white paper on the MDIC Case for Quality program. The team seeks to provide an independent source for Medical Device quality data across the seven domains through a dashboard that defines medical device quality.

Safety Effectiveness Reliability Patient Experience Usability Availability Compatibility

To this end, the PQOA team is working with the Maturity Model working group to evaluate correlations between the appropriate quality dimensions and results from quality assessments. In addition, the PQOA team is building strong connections with the National Evaluation System for Health Technology Coordinating Center (NESTcc) and is submitting a test-case

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THE VALUE OF ANALYTICS IN VALUE BASED HEALTHCARE concept that leverages data available through the NESTcc network in support of the Analytics dashboard. As we continue to shift towards value-based Healthcare, improving the quality of patient outcomes, enhancing patient-centered care and adopting initiatives that control costs depends on unbiased quality and outcomes, data is foundational.

Value analysis, medical, clinical, and supply chain professionals will use the data to guide strategic sourcing decisions.

It could assist manufacturers target device performance, user-interface, etc., or complications that may be corrected in the next revision or generation of product development

Regulators could use evidence-based data to evaluate a company’s commitment to Quality/Product Quality

Patients/consumers could provide input to decisions for device selection based on data

DRIVING QUALITY DATA TO SUPPORT VALUE To gain insights from key stakeholders on the use of analytics to support the transition to value based healthcare, Axendia interviewed a group of thought-leaders representing key stakeholders from the PQOA team to gain their insights and opinions on the value of the dashboard and how the project supports the Case for Quality (CFQ) as well as value-based Healthcare through improving the quality of patient outcomes, enhancing patient-centered care, and adopting initiatives that control costs. The Stakeholders Each of the stakeholders offered their unique perspective on the value proposition for the PQOA Dashboard. These thought-leaders are (in alphabetical order):

Stephanie Christopher - Program Director at Medical Device Innovation Consortium (MDIC). With a background in public health research and patient communication and education, Stephanie manages MDIC’s Science of Patient Input and Case for Quality programs.

Garth Conrad – VP Quality at BD Peripheral Intervention. Garth has been involved since the beginning of MDIC’s involvement in the Case for Quality by helping MDIC create a grant request that provided the initial funding associated with establishing the program. He was the project lead for the initiation of the analytics project. Michael Ruhlen – MD, MHCM, FAAP, VP Division of Medical Education, Atrium Health. Michael is a pediatrician by training who became a speaker for the Case For Quality

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THE VALUE OF ANALYTICS IN VALUE BASED HEALTHCARE because “I just became completely intrigued and engaged in the work that the Case For Quality has been charged with doing and the things that it's trying to accomplish on behalf of patients.” Michael Schiller – CMRP, Senior Director at the Association for Healthcare Resource & Materials Management (AHRMM). Michael has almost thirty years of healthcare supply chain experience. Working with the FDA and other agencies, academic institutions, associations, suppliers, and manufacturers, Michael brings the supply chain voice to the table. Nathan Soderborg – PhD, Principal Scientist, Statistical and Data Sciences, Exponent. Nathan has twenty-seven years of experience helping organizations improve quality and reliability and make effective use of data for problem solving. He has been involved with MDIC’s Case for Quality since 2015. Francisco (Cisco) Vicenty - Program Manager for Case for Quality, Office of Compliance, CDRH, FDA (OPEQ Pilot: Immediate Office, Strategic Initiatives Staff). Cisco has worked on Case for Quality efforts since 2012 and became the fulltime program manager in 2017. Cisco is actively working on FDA’s voluntary manufacturing and product quality pilot that is driving to shift the Agency’s focus and engagement from compliance to quality. PROJECT BACKGROUND The FDA launched the Case for Quality in 2011 following an in-depth review of device quality data and feedback from both FDA and industry stakeholders. The FDA's analysis flagged certain widespread or common manufacturing risks that impact product quality. The review also showed that manufacturers who focus on and manage those risks often become more productive, receiving fewer complaints, needing to open fewer CAPAs and investigations, and having lower quality-related product costs than their competitors. In simple terms, the review identified that an investment in quality has long-term payoffs. Focusing on the quality of medical devices is in everyone's best interest. FDA determined that there were three (3) barriers preventing a move towards device quality:

Lack of stakeholder engagement. The goal of getting everybody in the room to understand what's working and not working in terms of moving the needle to drive better patient outcome was addressed by the establishment of MDIC’s Case for Quality program

A focus on compliance. Traditionally FDA focused on compliance – it’s what the Agency trained the medical device industry to focus on.

The idea of there being a competitive space around medical device product quality that prevented patients, providers, payers, etc. from having more visibility into the

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THE VALUE OF ANALYTICS IN VALUE BASED HEALTHCARE

performance of products so that they could make more informed quality purchasing decisions.

The Case for Quality, a collaboration between FDA, the Medical Device industry, healthcare providers and quality experts, released its report on the feasibility and effectiveness of using standardized medical device performance data and analytic techniques to help hospitals better compare and evaluate product quality. MDIC's public-private partnership allowed FDA and industry and other key healthcare stakeholders, such as hospital and physician groups, and patients, to work together to move from a culture of compliance to one of continuous quality improvement aimed at improving patient outcomes. In the initial phase of this project, the Case for Quality PQOA working group conducted a pilot with seven hospitals. Data was collected from several publicly available data sources including the Manufacturer and User Facility Device Experience (MAUDE) database and the manufacturers themselves around seven quality parameters:

Safety Effectiveness Reliability Patient Experience Usability Availability Compatibility

This data was then analyzed to calculate key performance indicators, which were presented to Value Analysis Committees (VACs) via four quality dashboards that contained an overview and rankings by data source, manufacturer and product. The VACs provided feedback through surveys and focus groups. The full report is available at the MDIC’s Resource Center for Sustained Quality page here: MDIC Resource Center for Sustained Quality. MDIC-facilitated discussions within the medical device industry ecosystem in general and VACs in particular, clearly showed that stakeholders would benefit from access to medical device quality information in order to support purchase decisions that can potentially result in improved patient outcomes and better cost management. As there was no formal approach to measure and provide feedback to reward the market for quality the project team developed and evaluated standardized definitions for Quality. To evaluate the value of this approach, a dashboard was developed based on input from a multi-disciplinary group that included hospital VACs, manufacturers, regulators, industry

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THE VALUE OF ANALYTICS IN VALUE BASED HEALTHCARE SMEs and data scientists with the intent to compare manufacturers across these domains using data and analytic techniques. MDIC’s white paper addressed the benefits and challenges of developing and deploying this compilation of data. THE VALUE OF ANALYTICS AXENDIA: To understand the value of having analytics on medical devices, we asked thought leaders for their perspective. CISCO VICENTY: “The development of a third party model for product performance data supports the shift from being very focused on compliance to being focused on quality. Creating a competitive marketplace around device quality provides the environment and transparency, in an objective manner, for device performance once in use. When you have so much complexity and a whole dynamic ecosystem from manufacturer all the way to the final patient there's a lot that happens along the way. Using real world data, real world evidence, real world performance, gives us a lot more visibility into where we, as an agency and a collective ecosystem, need to target resources to respond to issues, drive improvement, drive better education, and increase awareness.”

STEPHANIE CHRISTOPHER: “The real promise of the analytics project is the ability to make information available to care providers, physicians, and also patients, and, where appropriate, to use this information to help them achieve the best possible outcomes.”

GARTH CONRAD: To answer this question Garth referred back to the beginning of the Case for Quality project when the team wanted to understand the process the hospital VACs utilized when they're evaluating technologies being used at hospitals. What was learned was that every VAC does things a little differently, but there was some fundamental information that they all tried to obtain. These searches were being done independently using information that was available publicly to help them make decisions with varying results.

"It became apparent as we were scoping this project that first of all we could offer VACs an independent, non-partial source of information. Secondly, we could provide a standardized method of collection of information we could relieve some of the burden members of the VAC's have trying to collect that information. The third item was a single method analysis and visualization of that information. By doing this, we could actually help create a more common uniform method across all VAC's and help improve the process for acceptance of new technology into the hospital systems.”

MICHAEL SCHILLER: “The biggest value is patient outcomes. In today's value-based healthcare environment, it is the patient, and no longer the supply, that is at the center. Evidence-based data helps guide procurement decisions within an organization as to which

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THE VALUE OF ANALYTICS IN VALUE BASED HEALTHCARE product works best, with the patient population they care for, to produce the best outcome at the most appropriate cost is the ultimate goal. This is what AHRMM calls cost, quality, and outcomes (CQO).

CQO is a holistic approach to the healthcare supply chain where cost will always be an important variable, but it must be looked at along with the quality of the product, the quality of the patient experience and patient satisfaction. Outcomes, from a CQO perspective is the financial sustainability of an organization as a result of improved outcomes. CQO is not about solving a supply chain problem, it’s about solving a Healthcare problem.”

DR. MICHAEL RUHLEN: “Individual providers in healthcare, acute care hospitals, clinics, basically all providers, have been working with value-based purchasing through Federal, State and third-party payers for quite a period of time. We've been involved in the hospital engagement networks and subsequent federal initiatives so that we have become fairly comfortable with, acknowledge and participate in the design of quality and safety metrics. While we didn't like it at first, we've become aware that that the initiative has really enhanced quality of care and safety for the American public.

While it's uncomfortable talking about results and bringing the scrutiny of results into a public forum it's absolutely necessary to help entities really figure out that they do have to improve their quality. That's one of the reasons this whole effort resonates so significantly with me.” NATHAN SODERBORG: “The value of analytics is improved decision-making capability for all stakeholders. Accurate data that is interpreted well provides manufacturers feedback for improving their devices. It gives Healthcare providers, purchasing organizations, physicians, and patients valuable information on how products perform across the various quality domains, which allows them to make more informed choices. Well informed choices will then drive quality improvements throughout the system.” CHALLENGES ACCESSING DATA AXENDIA: There are a number of challenges around gathering reliable data that are needed to enable informed decisions. Can you share your perspective on some of the challenges that the PQOA team has encountered? STEPHANIE CHRISTOPHER: “Basically the challenge is getting to the data and making it usable. One of the biggest challenges is the hesitation on the part of manufacturers, because what we're really asking them to do is to lay it all on the table in a way that they haven't had to before.

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THE VALUE OF ANALYTICS IN VALUE BASED HEALTHCARE Look at the promise of electronic medical records, where you are up to your ears in data. The challenge now is how do we access that data, and how do we make use of that data. There are challenges with regards to the consistency and the transfer of the data (e.g. switching care providers).” GARTH CONRAD: “Medical device manufacturers have not been open to broadly sharing information or data that they have. Couple of reasons for this, first there is a concern that information provided would be misunderstood and used incorrectly by litigators. The second, is that information could be misrepresented and used by your competitors. Everyone likes to share good information, but when the information needs to be provided with context around what it means there is a fear it would be used in a negative manner. As such, the safest route is to only share it with regulators when you have to or with specific customers upon their request. Anyone that has been involved in any form of analytics will tell you that the acquisition and cleansing of data is the most difficult part of any solution. Disparate systems and non-uniform data structure cause a lot of problems. Our project team is finding very similar challenges in that sources of data are difficult to identify. Even when a date source is found there is no decoder key that allows you to link it to other sources of information.“ CISCO VICENTY: “We need to shift the dynamic with industry around data sharing in order to enable a lot more trust and engagement around performance issues. This shift needs to happen, so that we can get these analytic discussions started, improve the use of the data, and then work to enhance that data with real world sources afterwards. Right now, everything is very reactive; there is not a lot of information that is connected and shared. We want to get manufacturers to start sharing, we want the hospitals to start sharing, and start shifting the dynamic on how the data is collected, analyzed, and what it is used for. It's a big undertaking and it's not going to be solved overnight. It's going to take time to determine what the right information and data sources are needed to for this to happen. Additionally, there are concerns from a liability standpoint and the risk of exposure which causes an environment of fear. That is not beneficial for patient outcomes. It's not beneficial for improving the product. It's not beneficial for improving the process. We truly need to figure out how to change the dynamic so that information can be safely shared to address public health issues quickly and effectively. If there is always the risk of a class action or an FDA action, it creates a culture of avoidance and defensiveness that results in patients being affected. The other barrier to consider is that there are people who have put in significant effort, invested a lot, into collecting some of this data – it is their intellectual property. There is a question by those who have already invested - how do we make this so that there isn’t a loss of that IP and it's actually beneficial for them to come in and share this information on their end?”

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THE VALUE OF ANALYTICS IN VALUE BASED HEALTHCARE NATHAN SODERBORG: “Data access challenges have arisen in multiple areas. Manufacturers are naturally reluctant to share information that may be the source of competitive advantage or reveal weaknesses in products. Healthcare providers have major concerns over patient privacy and potential connection to liability and litigation matters. Registries and other data repositories have invested significant time and money in collecting what they have and are reluctant to share without compensation or help in fulfilling their particular mission. These are major concerns that need to be addressed through commitment and a high level of collaboration.” MICHAEL SCHILLER: “A major hurdle we need to clear is gaining access to data; supply chain and clinician access to unbiased data. Data does exist. However, it is fractured and resides across many varying data pools, including EHR's, where 70% of the data is unstructured, registries where there can be a fee required to accessing that data, and claims. This is where the Unique Device Identifier (UDI) can play a powerful role by linking together these disparate data sets through the UDI-DI or device identifier. Healthcare organizations are beginning to capture the UDI-DI information into their clinical documentation and EHR systems. Once captured, they can begin to analyze product use, clinical and practice variation, as well as the total cost of care. You begin to look at these variables across a specific procedure/surgeon data set and the data begins to guide you as to where the opportunities to standardize and eliminate variation exist. Variation is the enemy of improved outcomes.” DR. MICHAEL RUHLEN: “One of the very first things that pops up with patients is the privacy of their healthcare information. Patients are going to want to know what entries in their electronic health records, even if used for quality purposes, will remain confidential to their healthcare providers. As a result, we need to address concerns about data, data breaches and confidentiality of information, even while developing data sets around devices. The next concern is related to providers of care and misadventures that might occur due to the use and /or misuse of devices. Quality review committees are convened to evaluate significant mishaps involving medical devices and to evaluate causation. Instead of a harm event being attributed to a clinician's misuse of a device, in the absence of data and in the presence of opinion, an event may be inappropriately attributed to the device /device manufacturer! The Case for Quality analytics effort has the potential to help define causation. I think that the metrics, the registries, create an opportunity to bring a more truthful understanding of the dynamics that circulate around adverse events related to medical devices. This opportunity can, however, make the providers of care uncomfortable and make them not so thrilled to engage in this activity. The American public loves to assign blame and attorneys love to seek damages in relationship to that allocation of blame. Until some component of healthcare reform actually impacts the dynamic of those lawsuits,

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THE VALUE OF ANALYTICS IN VALUE BASED HEALTHCARE there probably will be some discomfort about this body of work on both sides of the equation.” OPPORTUNITIES TO LEVERAGE DATA AXENDIA: What are some of the opportunities to leverage other projects in order to address the challenges you have identified to overcome that challenge of having the right data? CISCO VICENTY: “National Evaluation System for Health Technology Coordinating Center (NESTcc) is trying to answer the question of an overarching structure that will tie together a lot of these already existing data sources – to provide the linkage, accessibility to the information, and knowledge sharing. Another effort driven by the focus on value-driven care, which is going to help is that more medical device companies are entering outcome-based agreements with healthcare providers. It's going to drive the availability of more and better data to support the financial models and incentives in these agreements, and some of those results and data will be publicly available.” STEPHANIE CHRISTOPHER: “I think there is an opportunity right now, both with NESTcc as an MDIC initiative, but really within the broader medical ecosystem, we're seeing this shift to availability of data. I think that's part of NESTcc's mission, not just with quality data, but to really harness the fact that we have data available to us in all sorts of forms that can tell us about the performance of medical devices, whether that be understanding other indications for use, or understanding safety signals, or understanding measures of quality. I appreciate the NESTcc team's approach to doing things like demonstration projects and test cases on a smaller scale, to be able to demonstrate what is possible when we access the data and use it to learn more about the performance of a medical device. “ GARTH CONRAD: “Unique Device Identification (UDI) is one of those decoder keys that will allow for cross platform analysis of information. It should link the full life-cycle of a product from manufacturing all the way through the electronic patient record. It will help to enable large data lakes to be connected together and provide insight that we have never been able to access previously.” MICHAEL SCHILLER: “My hope is that as the UDI becomes more broadly adopted within the healthcare setting, captured at the point of use, we can begin to build a volume of data around the medical devices that are used within the care environment. Once that data is captured within a hospital's EHR, and resides downstream in device registries and claims, we can begin to assess device performance and determine the best medical device

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THE VALUE OF ANALYTICS IN VALUE BASED HEALTHCARE to be used for a specific patient population to deliver the best outcomes. It is here that we achieve access to unbiased data.” DANIEL MATLIS: “UDI serves as the primary key to unlock the power of datasets across the healthcare ecosystem. See: Hear Directly from FDA: Are You Done with UDI or Is This Just the Beginning? UDI allows the data across heterogeneous systems to be organized. I think that's critical and very valuable ... even though it is challenging to implement at this point. The unique device identification system, which will be phased in over several years, offers a number of benefits that will be more fully realized with the adoption and integration of UDIs into the health care delivery system. UDI implementation will improve patient safety, modernize device post-market surveillance, and facilitate medical device innovation.” See: Unique Device Identification SEVEN DIMENSIONS OF QUALITY AXENDIA: What do you see as some of the challenges of using the seven dimensions of quality that we have identified as part of the analytics team by regulators, providers, physicians, clinicians, as well as industry? STEPHANIE CHRISTOPHER: “The seven dimensions of quality gives some parameters for what exactly we're talking about, it gives us some guidelines. I think the challenge with a project like Case for Quality, and really just the arena of quality as a whole, is that quality means different things to different people which is not really useful from a data perspective. I think the one that's proving to be quite challenging is the patient experience data. It doesn't make it any less important because it's a challenge to measure it, but I think it's a challenge we're going to have to address. I think it's a reasonable approach that we start with some of the other dimensions that are a bit easier to capture.” DR. MICHAEL RUHLEN: “I think one of the biggest challenges that the effort will face is the utilization of results after manufacturers have demonstrated improvement. The maturity model [of the MDIC CFQ program] will potentially result in a modification of documentation requirements and shortened approval process. This should be a strong motivation for engagement with, and participation in, the program. The interesting dynamic in healthcare is that it's often not the patient who is the immediate consumer of device manufacturers. The immediate customer is more likely to be a healthcare provider who's trying to make a recommendation and a choice on behalf of the patients, but patients will ultimately want to have access to this information. I think ultimately what industry may perceive as threats to their business will, a few years down the road, just be common practice. I also think that ultimately, patients will have a greater

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THE VALUE OF ANALYTICS IN VALUE BASED HEALTHCARE opportunity to record their experiences with devices, physicians can choose more wisely, through Case for Quality resources or NESTcc resources, or whoever the arbiter of the registries is. The doctors will have access to such material much more directly than patients will and they always are going to be in the role of interpreting for the patient what the findings are on the websites and in the registries.” BECOME PART OF THE SOLUTION AXENDIA: Given all these changes and challenges and opportunities, how can the different constituents within the Healthcare ecosystem be part of the solution? What kinds of things can each of us do to move things forward to ultimately improve patient outcomes? GARTH CONRAD: “If you look at what Case for Quality has done and what the FDA has been trying to come back and show, as well as some of the other consulting companies that have been involved, is really what the return on investment is for companies that focus on improvement of quality. Now, if we step that down into the project teams and the efforts that are ongoing today, and the sharing of information between the manufacturers - whether that be in a safe space, or not in safe space - I think it comes back again to ‘What's the return on investment? What's the benefit that comes back to the company for participating in those efforts?’ Because that's what allows you to gain agreement from all functions, and in particular, senior leadership level or executive leadership level within the company.” CISCO VICENTY: “One of the very first things right now, if they want to be part of the solution, and are already gathering performance data in some way, shape, or form for the devices - especially when they've got devices where there is a connection or access to hospitals or real world data - bring them in! This is a large undertaking and no place is too small to start. We just need to start somewhere. We can, at the very least, figure out a way to create the safe space, to really talk about what they have and how we may be able to leverage it. Then we can figure out all the pieces and elements that are missing to make that truly a viable path forward. This will help us identify if there's work that the Agency needs to do on our end. If there's other, more significant activities that need to happen, from larger regulatory changes that need to occur, then this gives us also a very practical data point and a concrete path forward. It allows us to really know what it is that we should be targeting.” NATHAN SODERBORG: “In order to overcome the data access and sharing challenge, I see three important areas of focus: 1) Focus on results. Collect data on performance of

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THE VALUE OF ANALYTICS IN VALUE BASED HEALTHCARE devices in the field. Don’t worry initially about trying to leverage internal data from manufacturers. 2) Aggregate data. Share comparative results in such a way that individual patients or certain units within organizations are not identifiable. Organizations may be able to get more granular data for themselves, but would not be able see that level for other organizations. 3) Drive out bias. Develop mechanisms for grouping and portraying result data in such a way that comparisons are as fair as possible. This is not a simple task, but stakeholder groups should be involved in setting ground rules for how to convey the results. If meaningful progress can be made in these three areas, then there is hope that organizations may be able to work together to find ways to fund a data sharing and analytics system.” STEPHANIE CHRISTOPHER: “There is a need to develop safe spaces for bringing in data, bringing in problems that are emerging within manufacturers and being able to work with a cross industry collaborative space to solve problems. The FAA has a program like this where manufacturers can come in and talk about data without fear of repercussions. To be successful, more socialization needs to be done around the concept for the industry members to really be comfortable with it. I think we're at a point within the industry where there’s more trust being built into the submission process, but there are still manufacturers out there who say, "I'm not going to talk to the FDA before I have to. Why would I do that?" This is one of the challenges of MDIC: We have the big medical device companies at the table, which we absolutely need, but we need the perspective of small companies as well. It may be easier for the big company to try something new like this at a single site or with a single product limiting exposure and managing risk. For a small organization with a single site or a single product, trying something new may increase perceived risk. But those small organizations are an important part of the medical device industry, so we have to find ways to work with their reality. We're very fortunate in that we have a leader at CDRH that many in the industry are very comfortable with. And I know that didn't happen overnight, but that's a valuable thing and something to continue to build on.”

DANIEL MATLIS: “The challenge is, to your point, how do we socialize the Case for Quality across the entire organization. In our last research survey, Driving A Culture of Quality Within The Medical Device Ecosystem, we asked, "Are you familiar with the Case for Quality initiative?" About a third of respondents said “yes”. That means that two thirds of the respondents are still not familiar, or aware, that this exists. And many of those were at the same companies whose executives are on the board at MDIC!”

“We need involvement. And that involvement takes a number of forms. It takes joining a working group and helping them develop some tools. Enrolling your site in a pilot. It's sharing data. We can't know if the system works for industry without industry willing to be there and test it out, and this includes both large and small medical device manufacturers. We also need to have full engagement with the FDA, not just at the

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THE VALUE OF ANALYTICS IN VALUE BASED HEALTHCARE leadership levels, but at making sure it gets disseminated down to the inspectors and the people that are at the site level.” DR. MICHAEL RUHLEN: “Through our center we've figured out a mechanism to undertake confidential discussions that prevent a forced disclosure of information about problems through subpoena. Perhaps on a broader scale there might have to be legislation similar to the National Patient Safety Act that protects organizations that participate in data collection activities and are forthright about addressing concerns as they arise. Such legislation would provide a level of liability reform so that industry does not have to worry about being forthright in offering up data. Such reform should probably be eventually tied to the maturity model. Current processes can be perceived to be so onerous for industry that there may be awareness that a given device requires three or five or seven improvements to make it a better device. However, the focus is to fix the concern that is the focus of an acute complaint and to let the other elements ride to avoid starting a new application process again for a significantly altered device. We ought to have some ability to say to manufacturers, ‘We really appreciate the fact that you didn't only take on one corrective action, you took on five all at once.’ There ought to be some way that we can help industry facilitate the correction of more than just one element of a device at a time. “ DRIVING SUCCESS AXENDIA: What do you think we (the PQOA) need to be successful? STEPHANIE CHRISTOPHER: “We have to be able to show that it [the collaborative effort] works. We have to share our successes, but also share our challenges and how we fix those challenges. We have to be able to show that the system still works even when things go wrong. At the moment we are doing demonstrations. I think the next challenge we need to address is: How can we scale this? The only other point I would add about this project broadly, and about the analytics project in particular, is that this is such a tremendously important thing that we're doing. Not just for the industry, but what really matters is that this is going to help patients - to make sure that we get the best products we can into the hands of the patients who need them. No one wants to put a poor quality product on the market, no one wants to hurt a patient. But the “why this matters” is the impact this will have on the lives of the patients that we serve, and that's why we do what do. That's why we're all in this industry.” GARTH CONRAD: As with any change initiative we need the support of all stakeholders to accomplish our project. This includes industry, FDA, health-care providers, VACs and in the case of our pilot project, data collaborators from NEST. For this effort to be more broadly adopted after the pilot we need more participants from industry to believe in the

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THE VALUE OF ANALYTICS IN VALUE BASED HEALTHCARE value of sharing information. We have to create a safe-space for sharing to occur without the negative consequences that people are concerned about today. NATHAN SODERBORG: “Continued and more extensive collaboration. The variety of insight from the various team members has been fantastic. The goal established by the PQOA team is extremely challenging, but great ideas have come out of the group because of the diversity of experience and opinions. I think we need to raise this discussion to a higher level of stakeholders in each of the affected communities—leadership and executives among manufacturers, healthcare providers, payers, regulatory agencies, and data collectors.” MIKE SCHILLER: “My desire would be able to work collaboratively with manufacturers on developing a foundation of trust around data. Their concern, and understandably so, is that product performance is being gauged on one variable when there are other variables at play. Those variables exist today with the information that health care professionals are using to guide their strategic sourcing decisions. How do we develop a foundation of trust with improved data analytics, with the UDI and trending analytics and research at the registry level on device performance? To me, my magic wand approach would be to reduce the level of distrust that exists today and begin to replace that with an environment of trust.” DR. MICHAEL RUHLEN: I know the good intentions of industry and I know nobody ever wants to go out and produce a faulty thing that's going to hurt someone. They don't want to do that for all the right reasons because their goal really is to improve human health. I wholeheartedly know that now, and deeply appreciate their work. I'm not sure that I would have known that until I got engaged with this effort. It's one of the reasons I'm so appreciative of the opportunity to sit with the analytics work group.” CONCLUSION The Healthcare ecosystem is shifting towards a Value Based model focused on improving the quality of patient outcomes, enhancing patient-centered care and adopting initiatives that control costs. The successful transition to Value Based Healthcare hinges on the availability of unbiased quality and outcomes Data. Furthermore, the integrity of these decisions depends upon the accuracy and completeness of unbiased Analysis of underlying Data to support patient care decisions. To enable significant progress in this area, the MDIC Case for Quality PQOA brought together a multi-disciplinary group comprised of representatives from manufacturers, physicians, clinicians, healthcare providers, SMEs and FDA. The team’s work has made important inroads to provide an independent source for Medical Device quality data across the seven domains through a dashboard that defines medical device quality. To address

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THE VALUE OF ANALYTICS IN VALUE BASED HEALTHCARE data availability issues, the PQOA team is building strong connections with the National Evaluation System for Health Technology Coordinating Center (NESTcc) and is submitting a test-case concept that leverages data available through the NESTcc network in support of the Analytics dashboard. The MDIC CfQ PQOA working group will continue to support the shift to Value Based Healthcare by driving the availability, accuracy and completeness of unbiased analysis of underlying data to support patient centered care decisions. This Brief was written by Axendia, Inc. The opinions and analysis expressed in this Brief reflect the judgment of Axendia at the time of publication and are subject to change without notice. Information contained in this document is current as of publication date. Information cited is not warranted by Axendia but has been obtained through a valid research methodology. This document is not intended to endorse any company or product and should not be attributed as such. About the Authors: Daniel R. Matlis is Founder and President of Axendia. Dan has almost three decades of experience in the Industry spanning the Health-Science value chain. He has been an active member in FDA’s Case for Quality Initiative since 2014 and has presented Axendia’s research findings to industry executives and the FDA officials. Ellyn McMullin is a Research Associate at Axendia. She authors and assists in the development of white papers, articles and blogs for the Life Science Industries. She also supports senior staff members on research projects. About Axendia: Axendia, Inc. is a leading analyst and strategic advisory firm focused to the Life-Science and Healthcare markets. We provide trusted counsel to industry stakeholders on Business, Regulatory and Technology issues. Axendia was recognized by CIOReview as a one of the 20 Most Promising Life Sciences Technology and Services providers. For more information, visit www.axendia.com or contact us at info@axendia.com

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©2018 Axendia, Inc. All Rights Reserved. This publication is copyrighted by Axendia Inc. and protected by United States copyright laws and international treaties. This document may not be reproduced or posted on another web site without prior written consent from Axendia. Unauthorized reproduction of this publication or any portion of it by other parties may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent necessary to protect the rights of the publisher.

Published September 2018

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